In response to a month-old affect that has left the company without money as its factories idle, Boeing will throw off 10 % of its workplace in the upcoming month and reduce production.
After finishing its recent orders for 29 jets, the company announced on Friday that it would stop producing its Everett-built 767 cargo in 2027. It also delayed the implementation of another Everett, Washington-built planes, its new 777X, to 2026, following decades of documentation delays and the recent discovery of a , deficient portion that grounded check flights , earlier this year.
The work reductions will affect almost 17, 000 employees across all levels of the corporation, Boeing said Friday. It’s not clear how the slashes will affect the agency’s 66, 000-person Washington workplace, or the dazzling machinists. New Boeing CEO Kelly Ortberg told employees on Friday that the business needed to “reset our labor rates to coincide with our financial reality.”
Ortberg continued,” We need to be perceptive about the job we must do and realistic about how long it will take to complete crucial goals on the path to recovery.”
Instead of spreading ourselves across to some work that you frequently lead to weakness and underinvestment, he said,” We also need to focus our sources on performing and innovating in the places that are primary to who we are.”
When more than 33 000 tradesmen left the job on September 13 and a time of slow manufacturing following a panel blowout in January, Boeing was already in a weak fiscal position.
Both events have accused the other of refusing to negotiate in good faith as the hit draws to a close, and the two are still polarized over new lease terms, especially regarding salary increases and pension benefits.  , Talks broke down this week , after two days at the bargaining table, leading Boeing to withdraw its most recent offer.
In financial results released ahead of its scheduled earnings call later this month, Boeing stated on Friday that it anticipated losing$ 1.3 billion in operating cash flow during the third quarter of this year. It expected third quarter revenue of$ 17.8 billion, and a loss of$ 9.97 per share.
We regret making these decisions, and I sincerely wish we could refrain from doing so, according to Ortberg, who wrote to the staff on Friday.” We know these decisions will cause trouble for you, your families, and our team. ” However, the state of our business and our future recovery require tough actions”.
In September, Boeing began one-week furloughs for non-union employees to save money while its factories sat idle. Boeing announced on Friday that it would end the furlough cycle and reduce its workforce by 10 % over the coming months.
The layoffs will affect all functions across Boeing’s 170, 000-person workforce, from executives to managers to frontline employees.
Next week, Ortberg promised to give employees detailed information.
The Society of Professional Engineering Employees in Aerospace, a union that represents white-collar engineering employees at Boeing, announced on Friday that it had asked the company for more information regarding the layoffs.
In a prepared statement, SPEEA Executive Director Ray Goforth stated that Boeing leadership has decided to harm every aspect of the company rather than resolve the IAM strike and concentrate its resources on restoring the trust of regulators and customers. ” This does n’t inspire confidence that there’s an actual plan to save Boeing from its self-inflicted wounds”.
Boeing stated in its preliminary financial results on Friday that it anticipated losing$ 5 billion for the third quarter of this year. It expected it lost$ 3 billion on the 777X and 767 programs in its commercial division.
It pushed the first delivery of 777-9 to 2026 and 777-8 freighter to 2028, resulting in a$ 2.6 billion loss.
The defense, space and security division reported$ 5.5 billion in revenue and$ 2 billion in losses.
In his letter to employees, Ortberg said Boeing’s defense and space division was” simply not where it needs to be”. Boeing expects” substantial new losses” in its defense division this quarter, driven by the strike,” continued program challenges” and the decision to end production on the 767 freighter. The 767 and 737 airframes are used in Boeing warplanes, and Boeing ending the commercial version of the 767 will increase the cost of its military derivative.
Boeing had originally intended to end its 767 program in 2028, but a provision in the recently passed Federal Aviation Administration reauthorization bill would have allowed it to continue selling the aircraft until 2033.
In Everett, Boeing will continue producing the KC-46 military tanker and the 777-9.
Boeing has faced financial pressure and heightened regulatory scrutiny nearly all year after a panel blew off a Renton, Washington-built 737 Max plane mid-flight in January. Since then, the business has slowed down production at its factories in order to concentrate on safety and quality, and it is still subject to more stringent oversight from regulatory bodies.
A , a , a government watchdog, accused the Federal Aviation Administration of failing to fix oversight of Boeing, allowing defects and noncompliances in its planes to slip through the cracks, and on the same day it announced workforce cuts and changes to long-term production.
A plea deal it entered earlier this summer to settle criminal fraud charges stemming from two fatal 737 Max crashes in 2018 and 2019. Boeing was also present in court on Friday for a hearing on it. In that hearing, those who lost loved ones in the collision demanded more criminal prosecution for Boeing and its executives for their roles in the accidents.
Ortberg asserted on Friday that Boeing continues to prioritize customer service, safety, and quality.
” We will navigate through this moment”, he said. ” We will reorient our business,” he said,” and we will win back all of our customers.”
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